Fashion flashback - a 100% mortgage

Abbey National is going all the way in a bid to revive the home loan market. Nic Cicutti reports

FLARED trousers, platform shoes and the tank-top have all had their comebacks in recent years. Last week it was the turn of another throwback to the 1970s and 1980s - the 100 per cent mortgage.

In a bid to breathe new life into a comatose mortgage market, Abbey National announced that it was bringing back the 100 per cent home loan for the first time since 1989.

The bank's offer comes as figures from the Halifax last week showed that house prices fell by a further 0.2 per cent in March, with the market showing an overall decline of 1.5 per cent over the past 12 months.

A separate survey for TSB showed that the real cost of home buying, based on the percentage of take-home pay needed to cover a typical mortgage, has drop-ped for the first time in a year.

The offer from Abbey National, Britain's second largest mortgage lender, is aimed at those who want to move out of their present homes but are trapped by falling house prices.

They will now be able to borrow up to the maximum valuation or purchase price of their new property if they so need. Charles Toner, the bank's retail division managing director, said: "We are committed to helping those who are having problems moving because of low or negative equity."

But Abbey National's 100 per cent offer is not as generous as its last one - first-time buyers are excluded.

Borrowers also have to pay an additional fee, similar to a mortgage indemnity guarantee, based on 25 per cent of any loan above 75 per cent of the purchase price or valuation. On a £60,000 mortgage, a borrower would have to find £1,500 for a 100 per cent mortgage. This is taken from the loan itself, leaving the buyer to make up the difference.

John Charcol, the mortgage broker, has negotiated a 100 per cent mortgage from Bradford & Bingley, with a 12-month discount that reduces the interest rate to 4.83 per cent.

Mortgage indemnity is added to the loan - allowing borrowers the full amount - but insurance on both buildings and contents is obligatory.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Client Services Assistant

£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor